Wednesday started with a strong bullish gap and then the rest of the day was really a sideways grind punctuated by small rallies and selloffs.  The SPY gapped up 0.87%, DIA gapped up 0.92%, and QQQ gapped up 0.86%.  However, from there we saw a major divergence with SPY and QQQ continuing to follow through with a rally the first hour before slowly grinding sideways with a slight bearish trend.  After the 5-minute reaction to the Fed decision/statement at 2 p.m., SPY was back to its opening level and QQQ was half way back down to that point.  The rest of the day was a roller coaster ride for those two leading index ETFs that left them little changed from the 2 p.m. level.  Meanwhile, after the gap higher, DIA sold off slowly and steadily all day, recrossing the gap on the Fed 5-minute selloff and then riding waves sideways the rest of the day.  DIA retested and failed its T-line (8ema) from below while SPY and QQQ both printed new all-time highs and new all-time high closes.This action gave us Shooting Star type candles in the SPY and QQQ (more body on QQQ’s star) and a gap-up Bearish Engulfing of a Doji in the DIA. 

On the day, six of the 10 sectors were in the green with Technology (+1.97%) way out in front (by almost a percent) leading the rest of the market higher.  Meanwhile, it was Communications Services (-0.97%) that was lagging well behind the other sectors.  At the same time, SPY gained 0.82%, DIA lost 0.07%, and QQQ gained 1.31%.  VXX was down almost 2%, closing at a very low 10.89 and T2122 spiked higher but settled back to close in the center of its mid-range at 51.68.  On the bond front, 10-year bond yields fell sharply to 4.318% and Oil (WTI) was 0.56% to close at $78.33 per barrel.  So, what we saw Wednesday premarket joy at good CPI data and then a drift lower until the Fed data wasn’t terrible.  The remainder of the day was a roller coaster ride on every word Powell uttered and the tea leaf reading of dot plots and statement parsing.

The major economic news scheduled for Wednesday included May Core CPI (month-on-month), which came in down and a tick lower than expected at +0.2% (compared to a +0.3% forecast and April reading).  On a year-on-year basis, May Core CPI was also a tick lower than expected and two-tenths down from April at +3.4% (versus the +3.5% forecast and +3.6% April value).  At the same time, the headline May CPI (month-on-month) was flat at +/-0.0%, lower than the forecasted +0.1% and well down from April’s +0.3% number.  On a year-on-year basis, May CPI was down a tick to +3.3% (versus the +3.4% forecast and April reading).  Later, EIA Weekly Crude Oil Inventories gave us an unexpected inventory build of 3.730 million barrels (compared to a forecasted draw down of 1.200 million barrels and the prior week’s 1.233-million-barrel build). Later, the May Federal Budget Balance was far higher than predicted at -$347.0 billion (versus a -$279.6 billion forecast and far worse than April’s +$201.0 billion surplus).

However, the big afternoon news was from the Fed, which left Interest Rates unchanged at 5.25%-5.50%.  At the same time, the FOMC Economic Projections (dot plots) showed a dramatically higher Q2 Current Year Interest Rate Projection of 5.1% (compared to a Q1 forecast of 4.6% this year and even well above the expected 4.9% value).  Meanwhile, the Q2 1^st Year Interest Rate Projection was 4.1% (which was dead on the predictions but two ticks higher than Q1’s forecast of 3.9% for 2025).  The Q2 2^nd Year Interest Rate Projection remained unchanged at 3.1% (in line with the forecast and Q1 estimate for 2026).  Finally, the Q2 3^rd Year Interest Rate Projection was up, but in line with predictions at 2.8% (compared to a 2.8% forecast of the forecast and up from Q1’s 2.6% average projection for long-term).

In terms of words, the Fed Statement said there has been “modest further progress toward the committee’s 2 percent inflation objective.” It also removed the entire section about reducing the Fed’s pace of decline in reducing its balance sheet.  During his press conference, Fed Chair Powell said “Our economy has made considerable progress toward both goals over the past few years.”  He continued, “We’ll need to see more good data to bolster our confidence that inflation is moving sustainably toward 2%.” …  “We see today’s report as progress and as, you know, building confidence … But we don’t see ourselves as having the confidence that would warrant beginning to loosen policy at this time.”  Finally, during questioning, he seemed to indicate that jobs data may be overstated.  Still, he said the jobs market remains strong and the cooling is gradual (which is a good thing).

After the close, AVGO reported beats on both revenue and earnings.  Meanwhile, PLAY reported misses on both the top and bottom lines.  It is worth noting that AVGO also raised its forward guidance.

In stock news, on Wednesday FDX announced it is cutting 2,000 “back office” jobs in Europe amid weak freight demand. Later, CAT hiked its dividend by 8% to $1.30/share and announced an additional $20 billion in stock buybacks.  At the same time, LUV CEO Jordan announced that he will not resign in the face of calls for him to do so from activist investor Elliott Investment Mgmt. (Elliott recently announced they’d taken a $1.9 billion position in LUV and openly called for leadership change.)  Later, SPCE announced a 1-for-20 reverse stock split to take effect on June 14.  After the close, JPM raised its guidance, saying it expects investment banking revenue to jump 25%-30% in Q2. 

Elsewhere, just a reminder that the TSLA shareholder meeting and vote on CEO Musk’s $56 billion pay package will be held today. 

In stock legal and governmental news, on Wednesday, the NHTSA announced that FSRN (Fisker electric vehicles) will recall 18,000 cars due to faulty software that cause the cars to act “in non-compliance with safety standards.”  Later, a US appeals court threw out a lower court order that had agreed with the NRLB ruling prohibiting AMZN from firing union supporters.  The ruling essentially allows AMZN to fire employees it thinks support unions or unionization of AMZN facilities.  At the same time, thousands of AMZN “flex drivers” (who work like UBER drivers) classified as contractors have filed arbitration claims. The 15,800 drivers submitted claims, seeking to be treated as full-time employees, paid overtime, and reimbursed for work-related expenses like mileage and cell phone use.  (453 similar cases are being litigated in courts.)

Meanwhile, a lawsuit was filed against CAG alleging the company has been deceiving consumers by both “short weighting” its packages and shipping frozen fish products that were not 100% fish.  At the same time, Reuters reported that the NHTSA is seeking information from GOOGL related to a series of incidents involving the Waymo (the company’s self-driving vehicles unit).  The investigation stems from 22 reports the NHTSA received in May related to 17 collisions.)  Later, after the close, the FAA Administrator (head) Whitaker told the Senate that it will maintain increased in-person oversight of BA and SPR for the foreseeable future.

Overnight, Asian markets were mixed again but leaned to the green side with eight of the 12 exchanges above break-even. Taiwan (+1.19%), New Zealand (+1.11%), South Korea (+0.98%), and Hong Kong (+0.97%) paced the gains.  However, in Europe, we see red across the board at midday.  The CAC (-1.23%), DAX (-1.05%), and FTSE (-0.45%) lead the region lower in early afternoon trade.  Meanwhile, in the US, as of 7:30 a.m., Futures are pointing toward a mixed to green open.  The DIA implies a -0.29% open.  However, SPY implies a +0.13% open and QQQ implies a +0.66% open at this hour.  At the same time, 10-year bond yields are at 4.316% and Oil (WTI) is off by 0.65% to $77.99 per barrel in early trading.

The major economic news scheduled for Thursday includes Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, May Core PPI, and May PPI (all at 8:30 a.m., and Fed Balance Sheet (4:30 p.m.).  We also hear from Fed member Williams (noon) and Treasury Sec. Yellen (noon).  There major earnings reports scheduled for before the open include Thursday, KFY and SIG.  Then, after the close, ADBE and RH report.   

In economic news later this week, on Friday, May Import Price Index, May Export Price Index, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, Michigan 5-Year Inflation Expectations, and the Fed Monetary Policy Report are reported.

In terms of earnings reports later this week, on Friday, there are no reports scheduled.

So far this morning, SIG and KFY reported beats on both the revenue and earnings lines.

In miscellaneous news, AAPL’s two-day rally Tuesday and Wednesday (following its “AI-heavy” developer’s conference) has taken it back to the top spot as most valuable (largest market cap) in the world.  AAPL was worth $3.29 trillion at the close mid-week. Elsewhere, the US Treasury expanded sanctions on Russia Wednesday.  The new sanctions forced Russia to halt all Dollar-based and Euro-based trading on its main stock exchange.  Meanwhile, the head of the Consumer Financial Protection Bureau testified before Congress that it has reported that JPM and PYPL intend to use their customer’s payment data to allow targeted advertising.  Chopra called on Congress to pass laws preventing this financial transaction data from being sold for marketing purposes. Finally, an EPA study found the air in southeast Louisiana (Chemical alley) is toxic, containing a thousand times higher levels of ethylene oxide than is considered safe.  Long-term exposure to this chemical is known to cause cancer.  (Dangerous levels start at 11 parts per trillion, but measured levels reached 40 parts per billion.)

In Fedwatch news, following Wednesday’s announcements and statements, the Fed Funds futures show 91.7% of traders expect no cut in July.  The probabilities also show a 61.5% chance of a September cut, a 74.3% probability of a cut by the meeting in November, and a 93.5% likelihood of a cut by the December meeting.  With that said, the average of the Fed dot plots now expects one rate cut this year.

With that background, the Bulls gapped QQQ and to a lesser extent SPY higher to start the premarket. (Mostly on an Elon Musk tweet that he is confident he has the votes to get his $56 billion pay package approved later today.) Meanwhile, DIA gapped lower to start the early session. All three of the major index ETFs have printed indecisive black-bodied candles since that start to the morning. Again, SPY and QQQ sit at all-time highs as they wait for the open. So, we have a mixed picture in the short-term, but on numbers, the Bulls have the upper hand, just certainly not decisively. At the same time, the mid-term remains bullish in all three major index ETFs and the longer-term market remains very Bullish in trend. In terms of extension, QQQ is now extended far above its T-line and is badly in need of rest or pullback. Neither of the others are extended from their T-line. However, the T2122 indicator is back in the the center of its mid-range. So, the bottom line is that outside of the QQQ, the market has room to run in either direction. With regard to those 10 big dog tickers, six of the 10 are in the red this morning. However, TSLA (+6.86%) and NVDA (+2.08%) are two of the four in the green (and remember those two trade much more stock than any others on average…many times more in fact). Remember, that we do get PPI numbers and Jobless Claims this morning and that has the potential to move markets (although usually not as much as yesterday’s CPI numbers). So, beware of volatility early.

As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!

See you in the trading room.

Ed

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade:  PYPL, TGT, and ZS.   Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.

🎯 Friday 6/21/19  (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

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DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it.  Past performance does not guarantee future results.  Terms of Service

Stocks gapped lower to start the day Tuesday.  SPY gapped down 0.29%, DIA gapped down 0.43%, and QQQ gapped down 0.28%.  All three major index ETFs then saw 30 minutes of follow through to the downside.  However, this was a Bear trap as price reversed and whiplashed higher.  QQQ had recrossed it opening gap by 10:45 a.m., at which time SPY was just crossing up into its gap.  Then after a sideways grind along the opening level, SPY started to rally again at 1:30 p.m. and broke above its prior close at 2:20 p.m.  From there, SPY and QQQ ground sideways until a day-end rally the last 10 minutes took them out on their highs.  Meanwhile, a 75-minute morning rally DIA was slower and did not even cross into its opening gap until 2:25 p.m. and from there ground sideways the rest of the day.  This action gave us large, white-body candles with lower wicks in the SPY and QQQ while DIA printed a gap-down large-handle white Hammer.  DIA crossed back below its T-line (8ema) while SPY printed a new all-time high close, and QQQ printed both a new intraday high and all-time high close.

On the day, nine of the 10 sectors were in the red with Technology (+0.69%) was way out front as the only green sector while Financial Services (-1.07%) was by far the worst performing sector.  At the same time, SPY gained 0.24%, DIA lost 0.34%, and QQQ gained 0.68%.  VXX was just on the green side of flat, closing at a very low 11.11 again and T2122 fell back into the oversold territory, to close at 15.45.  On the bond front, 10-year bond yields fell to 4.400% and Oil (WTI) was just on the green side of flat at $77.83 per barrel.  So, Tuesday was a Bear trap with a significant gap lower and then some follow-through.  However, then we reversed and give-or-take some periods of consolidation, the rest of the day was a bullish rally.  It is worth noting that AAPL (+7.26%) was the major driver behind the performance of QQQ and SPY.  (AAPL also traded more than $35 billion of stock on the day, which is more than three times its average.  Meanwhile, SPY traded less than half of its average volume and QQQ traded about one-third of its average volume.  For its part, DIA traded a little more than half of its average volume.)

The only major economic news scheduled for Tuesday was limited to EIA Short-Term Energy Outlook, which raised its forecast to even higher records of US oil production.  The agency now expects the US output to grow by 310k barrels-per-day to 13.24 million bpd. (About a 40k bpd increase in forecast since May’s version.)  For reference, EIA expects global average oil production to be 102.6 million bpd. (So, we produce about 13% of the world’s oil.) At the same time, EIA expects US natural gas production to decrease by 1% in 2024 due to low natural gas prices. Then, after the close, the API Weekly Crude Oil Stocks report showed a larger-than-expected drawdown of 2.428 million bpd (compared to a forecasted 1.750 million bpd draw and far lower than the prior week’s 4.052 million bpd inventory build. 

After the close, ADSK and CASY both reported beats on both the revenue and earnings lines.  Meanwhile, ORCL missed on both lines.  (However, ORCL rallied on new deals with GOOGL and OpenAI.  CEO Ellison also told the call that he is open to a deal similar to the GOOGL deal with AMZN.)

In stock news, on Tuesday, GM announced its board had approved a new $6 billion stock buyback program. (Later, GM reduced its forecast for 2024 electric vehicle sales from 200k-300k down to 200k-250k.)  As mentioned earlier, AAPL had a huge day on optimism that its “AI” projects announced Monday will drive profits.  However, Elon Musk criticized AAPL both Monday and the Tuesday morning, threatening to ban AAPL devices from his X (Twitter) platform if they integrate OpenAI ChatGPT into its OS.  At the same time, Bloomberg reported SPOT is planning a new, more expensive tier of subscription.  Later, Reuters reported that UBS and CS may complete their merger by July 1 according to multiple company executives.  At the same time, BA reported plane deliveries that less than half of its May 2023 deliveries (BA delivered 24 in May, down from 50 in May 2023).  Later, AFRM announced that its buy-now-pay-later service will be integrated into AAPL’s Apple Pay later this year.  Meanwhile, NTIOF announced it is buying CBWBF for $3.6 billion in what will become one of the largest Canadian regional banks.

Elsewhere, Reuters reported that Taiwan-listed chipmaker MediaTek is developing new ARM-based chips which will run MSFT Windows.  This will be a direct response to AAPL using ARM-based chips in their computers the last couple of years.  (It could threaten INTC and AMD, which are the major x86 platform chipmakers for Windows.)  Later, the Wall Street Journal reported that Shari Redstone (inheritor of PARA control) has halted negotiations with Skydance Media after months and is now focusing on deals with companies interested in her company National Amusements, which owns 77% of PARA voting stock.  After the close, BA (and NASA) announced a rescheduling of the return of BA’s Starliner space capsule from the Intl. Space Station.  The announcement said reasons for the delay are fixing of faulty Starliner components, weather conditions, and ISS schedule issues (such as spacewalks).  On Monday evening, NASA had posted that another helium leak was found in the Starliner propulsion system.

In stock legal and governmental news, on Tuesday, ALK lost its appeal of an $160 million trademark dispute with Virgin Group in the UK.  At the same time, LVMUY had its Italian unit placed under court administration over labor exploitation after a probe of how its Chinese-owned subcontractors treated employees.  Later, JNJ agreed to pay a $700 million settlement to resolve lawsuits by 42 states and Washington DC.  (This has no impact on the 61k remaining lawsuits over the same “talc causing cancer” issue, but is a major step forward.)  Later, carmakers are facing 1.5 million lawsuits, totaling $7.6 billion dollars, in the UK for allegedly cheating on diesel emissions tests.  This includes F, VLKAF, and MBGAF companies as named defendants. At the same time, in Mexico, the Mexican government announced that VLKAF (Volkswagen) is formally under investigation for labor rights violations.  Later, a class action lawsuit was filed against RTX, alleging the company discriminates against job seekers who are older than 40 years old.  The suit was filed by AARP and two law firms.

Meanwhile, four FOX board members were subpoenaed in the company’s $2.7 billion defamation lawsuit filed by Smartmatic Voting Systems.  At the same time, four more states have joined the original 15 states plus the District of Columbia and the US Dept. of Justice in the antitrust lawsuit against AAPL related to the smartphone app market.  At the same time, the Federal Energy Regulatory Commission (FERC) ordered an LNG plant joint venture between BP, SHEL and others to provide customers documents about the mechanical problems that are plaguing the startup of the joint venture LNG plant in Louisiana.  The delays have deprived customers (such as BP, ED, REPYY, and others) of billions of dollars in business because they cannot get the LNG to sell.  Later, US chemical manufacturing industry groups filed suit against the EPA seeking to block the first-ever rule intended to reduce exposure of drinking water to 15,000 PFAS (so-called forever chemicals).  The chemical manufacturers allege that the EPA rule is “arbitrary and beyond the agency’s authority to regulate.”  After the close, Elon Musk ask a CA state court to dismiss his lawsuit against OpenAI and its CEO.

Overnight, Asian markets were evenly mixed with six exchanges in the red and six in the green.  Taiwan (+1.18%) and South Korea (+0.84%) led gainers while Hong Kong (-1.31%) and Japan (-0.66%) paced the losses. In Europe, the picture is much greener at midday with only two of 15 bourses in the red.  The CAC (+0.35%), DAX (+0.53%), and FTSE (+0.58%) lead the region higher in early afternoon trade.  Meanwhile, in the US, as of 7:30 a.m., Futures are pointing toward a start that is modestly on the green side of flat.  (Remember this is ahead of CPI data.)  The DIA implies a +0.10% open, the SPY is implying a +0.13% open, and the QQQ implies a +0.16% open at this hour.  At the same time, 10-year bond yields are down to 4.39% and Oil (WTI) is up 1.16% to $78.81 per barrel in early trading.

The major economic news scheduled for Wednesday includes May Core CPI and May CPI (both at 8:30 a.m.), EIA Weekly Crude Oil Inventories (10:30 a.m.), May Federal Budget Balance, FOMC Interest Rate Decision, Fed Statement, FOMC Economic Projections, Q2 Current Interest Rate Projection, Q2 1^st Year Interest Rate Projection, Q2 2^nd Year Interest Rate Projection, and Q2 3^rd Year Interest Rate Projection (all at 2 p.m.), and Fed Chair Press Conference (2:30 p.m.). There are no major earnings reports scheduled for before the open.  Then, after the close, AVGO and PLAY report.

In economic news later this week, on Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, May Core PPI, May PPI, Fed Balance Sheet, and we hear from Fed member Williams.  Finally, on Friday, May Import Price Index, May Export Price Index, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, Michigan 5-Year Inflation Expectations, and the Fed Monetary Policy Report are reported.

In terms of earnings reports later this week, on Thursday, KFY, SIG, ADBE, and RH report.  Finally, on Friday, there are no reports scheduled.

In miscellaneous news, news reports said Tuesday that Hamas responded positively to the US-backed cease-fire proposal.  However, Hamas is seeking some “amendments” to the terms of the deal.  Speculation on the potential impacts of a cease-fire on Red Sea shipping and oil markets began immediately.  Elsewhere, the EU announced new tariffs on Chinese electric vehicles.  These range from 38.1% for SAIC to 20% for Geely, and 17.4% for BYD.  The announcement said that TSLA (which also has a plant in China) will get an “individually calculated” tariff rate at a later stage.

In mortgage news, the US national average for a 30-year fixed-rate conforming loan fell from 7.07% to 7.02% last week. This caused a 16% surge in mortgage applications versus the prior week (and also one year prior).  This included a 28% pop in home refinance applications and a 9% increase in new home purchase applications.

With that background, the Bull appear to be in control early in the premarket. Both the SPY and QQQ opened the early session higher and have traded up a bit from there. This puts both of them at new all-time highs (if the market were to open at this price). For its part, DIA is also higher, but on more indecisive action as it retests its T-line (8ema) from below. So, the Bulls have the upper hand in the short-term but certainly not decisively. At the same time, the mid-term remains bullish in all three major index ETFs and the longer-term market remains very Bullish in trend. In terms of extension, QQQ is the only major index ETF far from its T-line and that is on the edge of being called too stretched. Meanwhile, the T2122 indicator is back in the top end of its oversold range. The bottom line is that the market has room to run in either direction but the Bulls have more slack to play with here. With regard to those 10 big dog tickers, seven of the 10 are in the green. NVDA (+0.51%), and MSFT (+0.44%) lead the gainers AAPL (-0.39%), fresh off its huge day Tuesday, is the laggard. Remember, this will all change when traders digest the CPI numbers at 8:30 a.m. Don’t be surprised if we see morning volatility, then drift into 2 p.m. and more volatility (even on no change by the Fed) after the FOMC statement as traders start gaming out the July meeting almost immediately from the tea leaves they get today.

As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!

See you in the trading room.

Ed

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade:  PYPL, TGT, and ZS.   Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.

🎯 Friday 6/21/19  (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

Free YouTube Education  •  Subscription Plans • Private 2-Hour Coaching

DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it.  Past performance does not guarantee future results.  Terms of Service

On Monday, markets gave us a modestly bearish start.  SPY opened down 0.14%, DIA opened 0.14% lower, and QQQ opened down 0.18%. From there, all three major index ETFs slowly meandered modestly bullishly the rest of the day.  (With that said, DIA was much more volatile with a wave lower before really starting is modest rally.)  This action gave us white-bodied candles in all three with SPY that could certainly be seen as Bullish Engulfing signals if you were to squint.  DIA retested its T-line (8ema) with the opening gap, but passed the test closing back above.  SPY and QQQ both closed at new all-time high closes (although neither of them took out Friday’s all-time intraday high).  It is also worth noting that if you draw it right (top across 3/28 and 5/23 candles), you could say SPY is right at the top edge of an ascending wedge.  This all took place on well below-average volume in all three major index ETFs.

On the day, seven of the 10 sectors were in the green with Energy (+1.36%) and then Utilities (+1.01%) well out front leading the market higher.  Meanwhile, Communication Services (-0.77%) was by far the laggard sector.  At the same time, SPY gained 0.31%, DIA gained 0.21%, and QQQ gained 0.40%.  VXX was just on the red side of flat, closing at a very low 11.11 and T2122 climbed up out of its oversold territory, to close at 27.01.  On the bond front, 10-year bond yields rose to reach 4.467% and Oil (WTI) spiked 3.12% to close at $77.89 per barrel.  So, Monday was basically a drifting day, where traders were probably biding time until the CPI and Fed announcements on Wednesday.  We opened lower, following Europe (which was perhaps rattled by the gains of far-right parties across the EU and the snap elections called in France).  From there, prices really just drifted slowly upward the rest of the day.

The only major economic news scheduled for Monday was the New York Fed 1-Year Consumer Inflation Expectations survey results.  This came in a tick lower than the May reading at 3.2% (compared to May’s 3.3% expectation).  At the same time, the survey found that the three-year inflation expectation remained flat at 2.8%.  However, on a 5-year outlook the survey saw inflation expectations rise to 3% from April’s 2.8% projection.

In stock news, on Monday, VSTO rejected a takeover bid from MNC Capital (the offer was $39.50 per share).  The VSTO board said the MNC offer would not be superior to the deal to sell its sporting goods division to a Czechoslovakian group for $1.96 billion.  (Separately, VSTO also said it had rejected a $2 billion offer from KNIT.)  At the same time, activist investor Elliott Investment Mgmt. announced it had taken a $2 billion position in LUV with intentions of ousting the current CEO and other leadership. Later, MS made analyst news when it lowered AMD to hold while simultaneously starting new coverage of AVGO and saying Broadcom is “the strongest AI play.”  (AMD lost 4.49% while AVGO gained 2.41% on the day.)  At the same time, the UAW announced a new tentative deal had been reached with “Ultium Cells” (a joint venture between GM and Korean giant LG).  Later, ROG signed multi-year content licensing deals with WBD and CMCSA’s NBS Universal unit.  At the same time, Elon Musk, in his capacity as CEO of X, announced he would ban AAPL devices from the service if AAPL integrates OpenAI at an OS level. (This came after AAPL announced that OpenAI’s ChatGPT was coming to its Siri.)  Later, an Israeli financial news website reported that INTC is halting its $25 billion plant expansion in Israel.  After the close, Reuters reported that APOS and KD are in talks to make a joint buyout bid for DXC.  The article said they were targeting $22 to $25 per share for the offer.  (DXC spiked 11.48% on the day, somebody knew something, closing at $18.45/share.)

In stock legal and governmental news, on Monday, the US Supreme Court agreed to hear an appeal seeking to dismiss a lawsuit against META related to its misleading investors about the Cambridge Analytica data-harvesting scandal.  At the same time, the Supreme Court refused to hear KR’s appeal seeking to block GRUB from using the fork and knife logo, claiming it is too similar to a KR house brand logo.  Meanwhile, the NHTSA announced that STLA is recalling 212k 2022 model SUV and pickup trucks over a software malfunction that may cause the electronic stability control systems to fail.  Later, the CA Attorney General sued the oil major firms (XOM, CVX, SHEL, BP, and COP), seeking to force those firms to give up the profits they made while also simultaneously deceiving the public about their contributing to climate change.  (This suit is seeking to be similar to the one that crushed the Tobacco industry decades ago.)  After the close, the full 11-judge panel of the US 9^th Circuit Court of Appeals ruled against UBER (who lost the original case, but won a 3-judge sub-set of the Appeals Court) on their case seeking to challenge a CA law that may force companies to treat drivers as employees rather than independent contractors.  Also after the close, the FDA Advisory Panel voted by 11-0 to recommend that LLY’s Alzheimer drug donanemab to receive full-use approval later this year.  (If approved, it would be the second Alzheimer’s drug approved to serve the 6 million US patients, along with BIIB’s Leqembi.

Overnight, Asian markets were mixed but leaned toward the red side with eight of the 12 exchanges in the region below water.  Australia (-1.33%) and Hong Kong (-1.04% were by far the biggest movers, leading the region lower.  In Europe, we see red across the board at midday.  The CAC (-1.09%), DAX (-0.73%), and FTSE (-0.90%) lead the region lower in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a down start to the day.  The DIA implies a -0.40% open, the SPY is implying a -0.34% open, and the QQQ implies a -0.35% open at this hour.  At the same time, 10-year bond yields are down a bit to 4.439% and Oil (WTI) is just on the red side of flat at $77.61 per barrel in early trading.

The major economic news scheduled for Tuesday is limited to EIA Short-Term Energy Outlook (noon) and API Weekly Crude Oil Stocks report (4:30 p.m.).  Major earnings reports scheduled for before the open is limited to ASO.  Then, after the close, CASY and ORCL report.

In economic news later this week, on Wednesday, May Core CPI, May CPI, EIA Weekly Crude Oil Inventories, NY Fed 1-Year Consumer Inflation Expectations, May Federal Budget Balance, FOMC Interest Rate Decision, Fed Statement, FOMC Economic Projections, Q2 Current Interest Rate Projection, Q2 1^st Year Interest Rate Projection, Q2 2^nd Year Interest Rate Projection, Q2 3^rd Year Interest Rate Projection, and Fed Chair Press Conference are reported.  On Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, May Core PPI, May PPI, Fed Balance Sheet, and we hear from Fed member Williams.  Finally, on Friday, May Import Price Index, May Export Price Index, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, Michigan 5-Year Inflation Expectations, and the Fed Monetary Policy Report are reported.

In terms of earnings reports later this week, on Wednesday, we hear from AVGO and PLAY.  On Thursday, KFY, SIG, ADBE, and RH report.  Finally, on Friday, there are no reports scheduled.

In miscellaneous news, ECB President Lagarde sought to tamp down expectations after last week’s first rate cut since 2019.  She told a newspaper interview that the Central Bank may wait several meetings between rate cuts, saying that the downward path may be “non-linear.”  Elsewhere, Reuters reported Monday evening that an independent federal monitor has launched an investigation of UAW union President Fain over allegations of retaliation against other union leaders.  (Among the allegations is the claim of former UAW Secretary/Treasurer that she faced retaliation for refusing to authorize certain expenditures for Fain’s office.)

In other news, Bloomberg reported the results of their survey of public records of pharmacy chains.  The survey found that CVS had three times more safety recalls than either WBA or WMT over the past decade.  Among CVS’s incidents were recalling house branded child pain and fever medication for being made with contaminated water, children’s drugs that were made with adult potencies, and baby nasal sprays that were recalled because they were made on machines used to produce pesticides.

With that background, the bears are in control of the premarket at this point. All three major index ETFs opened the early session a bit lower and have followed through with black-body candles up to this point. DIA has recrossed below its T-line (8ema) in the premarket this morning. With that said, again, only the DIA is below its T-line as the other two, broader, index ETFs remain above their own. So, the Bulls have the upper hand in the short-term but certainly not decisively. At the same time, the mid-term remains bullish in all three major index ETFs and the longer-term market remains very Bullish in trend. In terms of extension, none of the three are too stretched from their T-line (8ema) and the T2122 indicator is back in the lower end of its mid-range. The bottom line is that the market has room to run in either direction but the Bulls have just a little more slack to play with here. With regard to those 10 big dog tickers, seven of the 10 are in the red. AMD (+0.24%) leads the few gainers while their rival INTC (-0.58%) leads the more numerous losers. Don’t be surprised if we drift or vacillate ahead of Wednesday’s CPI and Fed news.

As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!

See you in the trading room.

Ed

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade:  PYPL, TGT, and ZS.   Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.

🎯 Friday 6/21/19  (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

Free YouTube Education  •  Subscription Plans • Private 2-Hour Coaching

DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it.  Past performance does not guarantee future results.  Terms of Service

Friday saw stocks open modestly lower on stronger-than-expected May Payroll data.  SPY opened down 0.18%, DIA started down 0.10%, and QQQ opened 0.11% lower.  At that point, all three major index ETFs rallied, recrossing that modest gap and getting to highs at 10:50 a.m.  Then all three sold off for 20 minutes part way back to the lows before meandering sideways with a slight bullish trend reaching highs at about 1:25 p.m.  From there, all three had another sharp 20-minute move back lower and then bounced before selling off again the last hour.  This action gave us indecisive, Doji-like candles in all three major index ETFs.  The SPY and QQQ printed white-body, high-wick Doji while the DIA printed a black-body, high-wick Doji.  All three remained above their T-line (8ema) with only DIA retesting.  However, SPY and QQQ also gave us new all-time highs.

On the day, all 10 sectors were in the red with Basic Materials (-1.92%) way out in front leading the market lower.  At the same time, Financial Services (-0.32%) held up better than the other sectors.  Meanwhile, SPY lost 0.12%, DIA lost 0.23%, and QQQ lost 0.09%.  VXX fell 1.24% to close at a very low 11.11 and T2122 dropped into oversold territory, closing at 13.54.  On the bond front, 10-year bond yields surged higher to reach 4.434% and Oil (WTI) dropped 0.37% to close at $75.27 per barrel.  So, Friday was a non-committal day that essentially was flat, near the all-time highs in SPY and QQQ. At the same time, DIA continued its begrudging uptrend with its own flat day. On the week, SPY gained 1.25%, DIA gained just 0.26%, and QQQ gained 2.72%.

In other market news, Gold fell by the most in two years on Friday, closing down 3.34%.  However, that was nothing compared to Copper which fell 4.94% and Silver which was down 6.69% on the day.

The major economic news scheduled for Friday include May Avg. Hourly Earnings (Month-on-Month) came in a tick hotter than expected at +0.4% (compared to a +0.3% forecast and April’s +0.2% value). On a Year-on-Year basis, May Avg. Hourly Earnings were also up to 4.1% (versus the +3.9% forecast and the April +4.0% reading).  At the same time, May Nonfarm Payrolls showed much stronger job growth than predicted at +272k (compared to the +182k forecast and the April +165k number).  On the private side, May Private Nonfarm Payrolls were also stronger than anticipated at +229k (versus a forecast of +170k and the April +158k reading).  Meanwhile, we saw the May Participation Rate fall to 62.5% (compared to the previous value of 62.7%).  This all led to a May Unemployment Rate that ticked higher to 4.0% (versus the forecast and April number of 3.9%).  For context, that breaks an all-time record of 27 straight months with Unemployment under 4.0%.  Despite conspiracy theorists mistaken beliefs, this sure seems to check out since the recent JOLTs data also showed job openings at a 3-year low.  Later, April Consumer Credit came in much lower than predicted at $6.40 billion (compared to a $9.30 billion forecast but far above the March -$1.10 billion value).

In stock news, on Friday, TSLA released a software update for Chinese customers giving them detailed navigation information, including lane-level guidance.  (It was reported that BIDU was the supplier of the detailed map data TSLA used.)  At the same time, Korean giant Samsung Electronics suffered its first ever strike walk-out by employees.  28k employees rallied on the day, but it was nothing but a PR event since it was held on a public holiday in order to not impact the operations.  Later, SAVE said, perhaps ominously, Friday that it is not considering Chapter 11 bankruptcy and is encouraged by its own plan following the JBLU deal being killed.  At the same time, Bloomberg reported that WBA had shelved its plans to IPO the Boots portion of its business.  However, WBA is still in talks to sell that Boots unit.  After the close, it was announced that KKR, CRWD, and GDDY will join the S&P 500 before the market open on June 24.  At the same time, RHI, CMA, and ILMN will be dropped by the S&P 500.

In stock legal and governmental news, on Friday, the NHTSA issued a warning to owners of 463k KIA 2020-2024 Telluride SUVs, warning the customers to park outside and away from structures until KIA can complete recall repairs.  (The NHTSA said there are reports of under seat fires and melting engines as well as many reports of smoke.)  At the same time, a UK Court ruled that V and MA must face a set of lawsuits over the fees it charges British retailers.  Later, TSLA filed court documents seeking to pay only a tiny fraction of the legal fees of the lawyers who sued (first in 2018 with the case running until 2023) to reduce CEO Musk’s pay.  Those lawyers won, throwing out Musk’s $56 billion pay package.  The lawyers billed for $5.6 billion but TSLA is fighting the fees, seeking to pay only $13.6 million.  TSLA claims there was no value to the company since Musk has re-submitted his $56 billion pay package and seems to have the votes to get it past by shareholders.  (In other words, we are too stupid to take advantage of the court decision, so we should not need to pay the lawyers who won it.)  At the same time, a federal court ruled GOOGL will pay a paltry $2.3 million (which will be tripled per law) to cover damages and, as a result, won’t have to stand jury trial in its digital advertising antitrust case. Instead, the antitrust trial over GOOGL dominance of the digital ad market will be heard by the judge (not jury) on Sept. 9. 

Meanwhile, a federal judge ruled YELP may sue (for trademark infringement and unfair competition) a business review website that claimed businesses could pay Yelp to get artificially higher star ratings.  Later, after months of lobbying by automakers, the NHTSA said on Friday that it will increase federal truck and SUV fuel economy requirements only to 50.4 mpg (fleet average for each carmaker) for 2031.  This is BARELY above the previous 49mpg that was requirement for 2026.  (The NHTSA original proposal was to hike it to 58 mpg by 2031.)  It should be noted that cars will have to average 38 mpg by 2031, which is a 2% per year increase (not starting until 2027) from the current standard.  At the same time, the FCC requested a change of venue for the case challenging its reinstitution of net neutrality.  (The case was filed by the major telecom companies in Cincinnati, OH with the 6^th Circuit and the FCC has now requested moving the case back to Washington DC.)  After the close, the FDA approved GSK’s treatment for RSV for patients 50-to-59-years in age.  This expands the market which was previously limited to patients 60 and older.

Overnight, Asian markets were mostly in the red with only three of 12 exchanges holding onto green territory.  Thailand (-1.06%), Shenzhen (-0.90%), and South Korea (-0.79%) led the region lower.  In Europe, the picture is even more bearish with all 15 bourses in the red at midday.  The CAC (-1.76%), on EU election results and PM Macron dissolving Parliament to call for snap elections, DAX (-0.66%), and FTSE (-0.34$) lead the region lower in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a start just on the red side of flat.  The DIA implies a -0.17% open, the SPY is implying a -0.09% open, and the QQQ implies a -0.04% open at this hour.  At the same time, 10-year bond yields are popping higher to 4.465% and Oil (WTI) is up 0.26% to $75.75 per barrel in early trading.

There is no major economic news scheduled for Monday.  There are no major earnings reports scheduled for before the open or after the close Monday.

In economic news later this week, on Tuesday, we get the EIA Short-Term Energy Outlook and API Weekly Crude Oil Stocks report.  Then Wednesday, May Core CPI, May CPI, EIA Weekly Crude Oil Inventories, NY Fed 1-Year Consumer Inflation Expectations, May Federal Budget Balance, FOMC Interest Rate Decision, Fed Statement, FOMC Economic Projections, Q2 Current Interest Rate Projection, Q2 1^st Year Interest Rate Projection, Q2 2^nd Year Interest Rate Projection, Q2 3^rd Year Interest Rate Projection, and Fed Chair Press Conference are reported.  On Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, May Core PPI, May PPI, Fed Balance Sheet, and we hear from Fed member Williams.  Finally, on Friday, May Import Price Index, May Export Price Index, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, Michigan 5-Year Inflation Expectations, and the Fed Monetary Policy Report are reported.

In terms of earnings reports later this week, on Tuesday ASO, CSAY, and ORCL report.  Then Wednesday, we hear from AVGO and PLAY.  On Thursday, KFY, SIG, ADBE, and RH report.  Finally, on Friday, there are no reports scheduled.

In miscellaneous news, C changed its Fed rate cut forecast on Friday.  Previously, C had expected a first cut in July, but after the May Payrolls Report, C moved that date to the September meeting.  Meanwhile, the Fedwatch tool showed that traders are pricing in only a 49% chance of a September rate cut with November having a 65% probability and December showing an 84.5% chance of a rate cut.  Elsewhere, Federal Reserve data released Friday showed that US Household Wealth hit a record $160 trillion in Q1 2024.  This was a 3.2% (or $3.8 trillion) increase over Q4’s record value.  Most of the gain came from the stock market rally. Separately, CNBC reported that the US created 600,000 new millionaires in 2023, a 7.3% increase in the total to 7.5 million people. (This was using the definition of millionaire as those with $1 million in investible assets, excluding primary residence, collectibles like art, or consumer durables.)

In other news, the Dept. of Energy announced Friday that it has sped up the purchase of oil to replenish the Strategic Petroleum Reserve to take advantage of current lower oil prices.  The DoE issued two solicitations to buy 6 million barrels for September – December delivery.  This is a massive money-maker by the Biden administration which sold oil in 2022 for an average of $95 per barrel and is replenishing at an average of $77 per barrel.  (Current prices are well below that, so the new solicitations should lower the average even more.)  This is one of the few times the government ever made money.  Furthermore, it makes perfect sense since the US is the world’s largest oil producer, meaning we have much less reason to have a strategic reserve than when we were importing most of our oil in the 1970s.  Finally, the Port of Baltimore fully reopened on Saturday for the first time since the Francis Scott Key bridge was struck and collapsed, closing the main channels in the process.

With that background, it looks as if the market is tepidly bearish but largely undecided in the premarket. QQQ made the biggest move, gapping down a bit to start the early session but has rallied the most on a white-body candle. Meanwhile, SPY and DIA are printing Doji-type candles not too far below Friday’s close. The DIA has given back its T-line (8ema) at this point, but not by much. With that said, only the DIA is below its T-line as the other two, broader, index ETFs remain above theirs. So, the Bulls have the upper hand in the short-term but not decisively. At the same time, the mid-term remains bullish in all three major index ETFs and the longer-term market remains very Bullish in trend. In terms of extension, none of the three are too stretched from their T-line (8ema). However, the T2122 indicator is in oversold territory. The bottom line is that the market has room to run in either direction but the Bulls have a little more slack to play with here. With regard to those 10 big dog tickers, they are evenly split. AMD (-2.33%) is the biggest mover of that group. Also, don’t forget that today is NVDA’s first day of trading at the new 10-for-1 split price. (TC2000 still is not reflecting it correctly. It has the correct price, but is indicating a 90% move lower rather than this was a split.)

As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!

See you in the trading room.

Ed

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade:  PYPL, TGT, and ZS.   Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.

🎯 Friday 6/21/19  (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

Free YouTube Education  •  Subscription Plans • Private 2-Hour Coaching

DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it.  Past performance does not guarantee future results.  Terms of Service

Markets were indecisive on Thursday.  SPY opened up 0.06%, DIA opened +0.04% higher, and opened up 0.16%.  From that point, all three major index ETFs meandered sideways the rest of the day.  This action gave us indecisive, Spinning Top candles in all three.  The SPY printed a small-body, black-body, Spinning Top that stayed well above its T-line (8ema).  SPY also printed a new all-time high.  DIA printed a white-body Spinning Top that retested but stayed above its T-line.  Meanwhile, QQQ gave us a bit larger-body, black-body Spinning Top that stayed well above its T-line.  QQQ also printed a new all-time high.  This all happened on well-below average volume in all three major index ETFs.

On the day, six of the 10 sectors were in the green with Energy (+0.41%) and Basic Materials (+0.40%) leading the market higher.  At the same time, Utilities (-0.98%) was by far the laggard sector.  Meanwhile, SPY lost 0.03%, DIA gained 0.20%, and QQQ lost 0.06%.  VXX fell 0.53% to close at a low 11.25 and T2122 fell but remains in the center of its mid-range, closing at 43.61.  On the bond front, 10-year bond yields fell from the premarket highs to gain only slightly 4.283% and Oil (WTI) gained 2.01% to close at $75.57 per barrel.  So, Thursday was very much a wait-and-see day. Traders seem to have been waiting on the May Payrolls reports…or maybe the Fed meeting next week. 

The major economic news scheduled for Thursday included Weekly Initial Jobless Claims, which came in higher than expected at 229k (compared to a 220k forecast and the prior week’s 221k).  This resulted in Weekly Continuing Jobless Claims that were also higher than anticipated at 1,792k (versus a forecast and prior week reading of 1,790k).  At the same time, April Imports were up to $338.20 billion (compared to the March value of $327.00 billion).  Meanwhile, April Exports were also up to $263.70 billion (versus a previous reading of $257.60 billion).  Together, that gave us an April Trade Balance with an increased but lower than expected deficit of $74.60 billion (compared to forecast of -$76.20 billion but up from the March -$68.60 billion).  In terms of productivity, the Q1 Nonfarm Productivity was up but a tick lower than was predicted at +0.2% (versus a +0.3% forecast and far less than March’s MASSIVE +3.2% value).  We also saw a Q1 Unit Labor Cost that came in significantly below the estimates at +4.0% (compared to at +4.7% forecast but far above Q4’s +0.4%).  Then, after the close, the Fed’s Balance Sheet showed a $28 billion decrease from $7.284 trillion to $7.256 trillion. 

After the close, DOCU reported beats on both the revenue and earnings lines.  At the same time, MTN and NGL missed on both the top and bottom lines.  It is worth noting that MTN also lowered its forward guidance.

In stock news, on Thursday, NIO (Chinese electric vehicle maker) announced it now expects Q2 vehicle deliveries to more than double from the same quarter in 2023. (NIO said sales revenue will also more than double to about $2.3 billion.)  Later, stock analysts at JPM reported that AVGO has won a chip design contract for GOOGL’s next generation AI chips.  Those JPM analysts expect this to result in a 125% increase in revenue for AVGO’s TPU program in 2024 (to $8 billion).  At the same time, BA’s Starliner capsule safely docked with the International Space Station.  However, the event did not exactly go flawlessly as several of the capsule’s guidance thrusters failed during the docking.  Later, Swiss giant Nestle (NSRGY) announced it will buy the rights to MRCB’s first-ever “fecal transplant pill” (yeah, you read that right) for an undisclosed sum.  (The pills are an alternative to invasive surgery to transplant biotic fecal materials.)  After the close, Bloomberg reported HTZ is close to closing a deal to get $700 million in secured debt to offset the company’s electric vehicle debacle.  Later, META’s WhatsApp unit announced AI tools for businesses as it tries to monetize the popular encrypted chat service.  At the same time, PIPR announced it has agreed to buy a smaller competitor (Aviditi) for an unspecified sum.  Elsewhere, EMR announced it has agreed to sell its remaining 40% stake in a Copeland joint-venture with BX for $3.5 billion. Later, EADSY (Airbus) announced its May plane deliveries fell 16% from the same month in 2023, down to 53 aircraft. 

In stock legal and governmental news, on Thursday, AMZN was hit with a $1.3 billion lawsuit by an organization representing small British retailers.  The suit alleges AMZN misused data from small retailer sales on its online marketplace to boost AMZN market share and profits from its own competing products.  Later, the FDA rescinded its June 2022 ban on Juul Lab’s e-cigarettes.  The move does not approve the products (final approval is still pending) but the move does place the Juul products back under scientific review.  At the same time, the NFL, and by relationship GOOGL, was hit with a multi-billion-dollar antitrust lawsuit over the legality of “NFL Sunday Ticket.”  The case started Thursday.  The basis is that NFL sold the rights to the package (out of market game viewing) to GOOGL for $2 billion and GOOGL’s YouTube unit sells the package to viewers for $449/year.  The plaintiffs claim the low cost of streaming, each team selling the package separately would offer a fairer market rather than the NFL having and giving a monopoly on the broadcasts to GOOGL. 

Elsewhere, the FTC and US Dept. of Justice reached a deal on Thursday that clears the way for antitrust investigations into MSFT, NVDA, and OpenAI related to artificial intelligence.  (NVDA has about 80% market share in the very lucrative AI chip market, allowing margins of 70%-80%.  Meanwhile, MSFT owns about 49% of OpenAI, which is the undisputed leader in the AI services space.)  Later, the US 6^th District Court of Appeals announced it will hear a series of telecom industry legal challenges to the FCC reinstatement of net neutrality, which is set to take effect on July 22.  At the same time, a federal jury acquitted British tech billionaire Mike Lynch who was accused of fraud related to his selling of his Autonomy company to HPQ for $11 billion in 2011.  After the close, the NTSB cited “incorrect assumptions” by an air traffic controller was the cause of a near-collision between jets owned by FDX and LUV in Austin TX in February 2023.  (The planes came within 170 feet of each other with the FDX jet forced to fly over the LUV jet on the runway.)

Overnight, Asian markets were mixed but leaned toward the green side.  Five of the 12 exchanges in the region were in the red, most notably New Zealand (-0.97%) and Shenzhen (-0.90%).  However, India, (+2.05%) and South Korea (+1.23%) led gainers and the region higher.  In Europe, we see a much weaker picture at midday.  Russia (+1.73%) stands out as the leading gainer (by 1.5%), while the CAC (-1.00%), DAX (-0.95%), and FTSE (-0.63%) lead 11 of the 15 bourses lower in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a mixed, flat start.  The DIA implies a -0.04% open, the SPY is implying a -0.08% open, and the QQQ implies a +0.02% open at this hour.  At the same time, 10-year bond yields are up a touch to 4.301% and Oil (WTI) is up 0.58% to $75.99 per barrel in early trading.

The major economic news scheduled for Friday include May Avg. Hourly Earnings, May Nonfarm Payrolls, May Private Nonfarm Payrolls, May Participation Rate, and May Unemployment Rate (all at 8:30 a.m.), and April Consumer Credit (3 p.m.).  There are no major earnings reports scheduled for either before the open or after the close on Friday.

In miscellaneous news, the US Dept. Of Agriculture announced that cattle infected with avian flu (N5H1) have died in five states.  Bird flu has infected cattle in 80 herds in the US, across 10 states, since late March.  The worst of these seems to be MI, where 10% of infected herds did not recover and died.  Elsewhere, the leader of the “Meme stock” short-squeeze craze (who goes by the moniker “Roaring Kitty”) scheduled a YouTube livestream event for noon on Friday.  Keith Gill (Roaring Kitty’s real name) recently announced a $116 million investment in GME.  GME shares popped 47% on the day and another 17% in afterhours trading on this news.

So far this morning, GME did report misses on both the top and bottom lines.  This led to a huge move lower in the premarket, even after the massive gains on anticipation of the Roaring Kitty livestream today. (As of this report, GME is down 9.26% from Thursday’s close, but that is 30% off the afterhours highs.)

In other news, the Israeli invasion of Gaza (and Rafeh) continues as it appears Israeli PM Netanyahu is doing his best to kill the cease-fire / peace deal.  Thursday, Israel bombed another UN school (the 108^th UN facility Israel has bombed since the October 7 attacks by Hamas).  The IDF claimed to have killed three Hamas leaders and as many as “20 or 30” Hamas militants.  However, reporters only saw 14 children and a dozen women among the dead with a similar number of women and children among the injured arriving at the hospital afterward.  (For what it is worth, those arriving at the hospital for aid reported that only refugees were in the school which was converted into a shelter.)  Israel also stopped more than 1,000 aid trucks (food, medical supplies, tents and diapers, and fuel type cargos) at the border as they use food as a weapon.  Predictably, Palestinian supporters, including the Houthi who have disrupted Red Sea and Suez Canal trade routes with attacks on commercial shipping, vowed to meet the Israeli escalations with their own escalation.  Needless to say, it does not look like the shipping problems (and skyrocketing container rates that result) will abate anytime in the near future.

With that background, it looks as if the market is undecided ahead of the May Payrolls and Unemployment data. All three major index ETFs have wobbled around the break-even area. All three are just on the green side of flat at the moment but not by a substantial amount. All three are also sporting indecisive candle types. With that said, all three are above their T-line (8ema). So, the Bulls are in control of the market in the short-term. At the same time, the mid-term remains bullish in all three major index ETFs and the longer-term market remains very Bullish in trend. In terms of extension, none of the three are too stretched from their T-line (8ema). The T2122 indicator also remains in the center of its mid-range. The bottom line is that the market has room to run in either direction. With regard to those 10 big dog tickers, eight of the 10 are green, led by META and INTC (both +0.36%). However, the two biggest dogs NVDA (-24%) and TSLA (-0.42%) are the red names on that list. Also, keep in mind that this is Friday and next week will have another Fed meeting. So, prepare your account for the weekend news cycle and don’t be surprised if markets give us a “Wait on the Fed” look after the May data report.

As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!

See you in the trading room.

Ed

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade:  PYPL, TGT, and ZS.   Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.

🎯 Friday 6/21/19  (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.

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